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Title 8: Medicaid Page 93 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Specific Non-MAGI-Related Resources Revised September 13, 2024 Annuities

Annuities (Cont.)  If the annuity cannot be assigned, transferred, or cashed in and the annuitant verifies that the annuity has no cash value, the annuity is not a countable resource. Count the total annuity payment as income to the annuitant when determining eligibility, spenddown, and client participation.

Annuities must also be reviewed to determine if the purchase of the annuity constitutes a transfer of assets for less than fair market value. See Transfers That Cause a Medicaid Penalty.

Request a copy of the contract and use the Annuity Release of Information, form 470-4699, to gather information on the annuity. If you need help interpreting the information provided on the form or the contract, send the form and contract to the DHS, SPIRS Help Desk. Burial Contracts 20 CFR 416.1201, 20 CFR 416.1231 (See also Transfer of Assets. 20 CFR 416.1246, 42 USC 1396p(d)) Exclude a prepaid burial contract as a resource if it meets one of the following conditions:  The contract is irrevocable and the applicant or member can’t access the funds.  Mutual consent of the applicant or member and the contract seller is required to revoke or access the contract, and the seller’s consent can’t be obtained.

 Liquidation of the contract would create a significant hardship to the applicant or member. Usually, the only hardship considered significant is requiring the applicant or member to move out of Iowa to access the funds.

Unless the contract clearly indicates that the burial contract is irrevocable, obtain a written statement from the contract seller that the funds committed to the contract are unavailable to the applicant or member.

Investigate a contract drawn up in another state to determine whether the law in that state permits irrevocable burial contracts and whether the contract is irrevocable under that law.